Union Dime Savings Institution v. Neppert

It is assumed by the learned counsel for the respondent that the decision in the case of the National Mechanics’ Banking Association v. Conkling ( 90 N. Y., 116 ) disposes of this appeal.

A. very brief examination, however, of the case cited will show that it has no application whatever to the case’ at bar except so far as it may declare the general principles

The extent of his obligation must be determined by the language used, read in the light of the circumstances surrounding the transaction. But when the intention of the parties has thus been ascertained then the court will carefully guard the rights of the surety and protect him against liability not strictly within the precise terms of his contract. The action was brought as was the one' at bar against a surety who had executed a bond to the plaintiff at the time it employed the defendant, Conkling, as a bookkeeper in its bank. The recitals and condition of the bond were that “whereas the above named plaintiff has appointed the above named defendant, Conkling, to the office of book-keeper, and Conkling having accepted the same ■■and consented to perform the duties thereof, now the con■dition of this obligation is such that if the above named ■Conkling shall faithfully fulfil and discharge the duties ■committed to and the trust reposed in him as book-keeper, and shall also faithfully fulfil and discharge the duties of ■any other office, trust or employment relating to the business of said bank which may be assigned to him or which he shall undertake to perform, etc., then the obligation to be void otherwise to remain in full force and virtue. Conkling continued to act as such book-keeper "until 1870. In that year he was appointed the receiving teller of the bank, at an increased salary, and continued to -act as such until he resigned. After his resignation it was -discovered that he had embezzled some of the funds of the bank, and the action was brought against the obligors upon the bond to recover the amount thus embezzled, and it was held in that case that the sureties undertook for the fidelity of the principal only while he was book-keeper, but if while book-keeper the duties of any other office were assigned to him, their obligation would also extend to the discharge of those duties. But it was held that the parties mot having .in contemplation at the time of the execution ■of this bond the appointment of the principal to a new office, they were not bound for defalcations committed in the new office to which he had been appointed.

In the case at bar the condition of the bond was as follows: that if the above bounden, Otto Baumann, who has been appointed clerk of said Union Dime Savings Bank by its board of directors shall faithfully and honestly dis

It is to be observed that the position in the bank which the appointee was to occupy is in no way referred to in the condition of this bond. He is simply described as a clerk; or in other words as a servant and employee of the bank, and therefore as long as he remained a clerk or servant or employee of the bank, he comes within the condition of the bond. There was no particular position in the bank, such as that of bookkeeper referred to in the condition of this bond as there was in the Case of Conkling.

In Ms case it is expressly stated that he has been appointed as bookkeeper, and the condition of the bond is that he shall faithfully fulfil the duties of such bookkeeper and shall, also, faithfully fulfil and discharge the duties of any other office trust or employment, etc. In that case the minds of the parties . were upon the office' of bookkeeper •and it was during his occupancy of that office that the condition of the bond applied and when that office was vacated there was no condition to be broken. In the case at bar, however, the condition of the bond is for the fidelity of the principal as clerk, or in whatever capacity he might serve the bank. Not “ and in whatever capacity he may serve the bank,” blit “or,” thereby intending that the obligation should cover not only the position as clerk but any other position in which he might serve the bank. In the Case of Conkling the additional duties were to be added to the original office; in the case at bar the new duties might be entirely distinct from the original employment as the condition is in the disjunctive and not in the conjunctive.

Therefore, even if, when the principal was appointed as teller, he was not to be still considered as a clerk in the bank, it would be within the condition of the bond and the intention of the obligors.

This view is borne out by the effect of the terms used in the remaining part of the condition of the bond. It is said in the evidence that as bookkeeper he had no charge of the moneys, funds, valuables or property of the bank, and that these words could have no application to the duties of that position. But we find in the condition of the bond the words: “ and shall faithfully apply and account for all such moneys, funds valuables and property which may come into his hands or under his control as such clerk.”

Our attention is called to some definitions from lexicographers. It is true that a teller is there called an officer of the bank, but in law he occupies no such position. His duties are entirely clerical, as much so as those of any other employees of the bank. .

It would appear, therefore, that the condition of the bond in question was broken, apd that there was a right to recover upon the part of the appellants.

The judgment should be reversed anda new trial ordered, with costs to appellant to abide event.

Macomber, J., concurs.

(Dissenting)—The plaintiffs sought to recover the penalty of a bond dated March 17th, 1873, executed by the defendant Baumann as principal, and by the defendant Neppert as surety. The condition was for the faithful performance by Baumann, who had been appointed a clerk of the plaintiffs, of “his duty as such clerk, cran whatever capacity he may serve said bank, and shall faithfully apply and account for all such moneys, funds, valuables and property which may come into his hands or under his control as such clerk, and deliver the same on proper demand to the order of the board of directors of the said Union. Dime Savings Bank, or to the person or persons authorized to receive them, without any fraud or other delay, then this obligation to be void; otherwise to remain in full force and virtue.”

At the time of the execution of the bond, Baumann occupied the position of bookkeeper. His. duties consisted of keeping books and accounts, and until a long time after-wards he had no connection with the cash in the bank. His position was advanced, however, from time to time, and his salary increased. In 1878 he commenced to handle the cash of the bank in the absence of the other clerks. In September, 1879, he was detailed to act as teller of the bank by Mr. Sprague, the secretary, and in 1881 he was

Prior to his appointment as teller and in 1879 he kept, as bookkeeper, about twenty deposit ledgers containing the individual accounts of plaintiffs’ customers. His duties as bookkeeper were gradually taken away from him, however, and at the time of his appointment as teller he kept one dedeposit ledger only, and it appears that it was usual in the plaintiffs’ bank to require tellers to do a small amount of bookkeeping, which was considered a part of their duties as such, the paying teller also keeping a deposit ledger.

In July, 1885, and after all the changes in the position and duties of Baumann had been made, he commenced to misappropriate the plaintiffs’ funds, and it was during the period commencing July 1st in that year and ending September 6, 1886, that all the moneys abstracted by him were received by him as teller; moreover, it distinctly appears by the testimony of the secretary of the plaintiff that if Baumann had been kept in his original position of bookkeeper, he would not have been able to have stolen the money.

A question relative to that subject drew forth this answer:

“ Certainly not; I don’t see any way in which he could without an accomplice. There is no evidence that he had an accomplice. I don’t think he had. All this money was stolen after Baumann was appointed a teller—he used his office as teller to enable him to steal money.”

The learned justice in the court below regarded the case of the National Bank Association v. Conkling ( 90 N. Y., 120 ) as decisive of this action, and, therefore, gave judgment for the defendant. It must be said that his conclusion in this regard was correct, for that case seems to fully justify the judgment rendered herein.

We had occasion to consider the result of that case in the Fourth Nat. Bank v. Spinney, (14 N. Y. State Rep., 216). There the question was, in many respects, the same as in this case, and it was held in a direction to the jury that if a principal entered into the employment of the bank as bookkeeper, even if other duties were superadded to that employment, the defendants were liable; but if he had been virtually removed from the position of bookkeeper and put into another position, which enchanced the liability of the defendants on their bond, then they were entitled to a verdict.

The statement of facts shows conclusively, that ihe principal herein was advanced to the position of teller, the

It will be observed that the condition of the bond in regard to the faithful application of and accounting for all moneys, etc., which might come into the hands of Baumann, relates to those received by him as such clerk. The language is : “property which may come into his hands or under his control as such clerk.”

In Webster’s Dictionary (edition of 1828), the words “clerk” and “teller” are defined as follows: Clerk, “a writer; one who is employed in the use of the pen in an office, public or private, for keeping records and accounts; as the clerk of a court.”

“Teller,” an officer of a bank, who receives and pays money on checks. And Worcester, Stormouth, Bouvier and Jacobs give substantially the same definition; and it appears to have been adopted by the court of appeals in the People v. Fire Comm'rs ( 73 N. Y., 437 ).

The phraseology of the condition of the bond in this case, seems to express clearly the intention of the surety, that his responsibility should be limited to such misconduct as his principal might commit whilst discharging his duties as a clerk eo nomine\ but if it be not confined to this restricted effect, it certainly calls for the application of the rule established in The Nat'l. Banking Association v. Conkling, and Fourth Nat'l. Bank v. Spinney (supra).

An examination of the requests to find submitted on behalf of the appellant has not created an impression that any wrong was done by refusing them, and the exception to the evidence is subject to the same criticism. All the facts are before the court necessary on the evidence submitted to determine the liability of the defendants applying to them the well-established rules governing such relations as are created by the bond in question. The facts found rest chiefly upon the testimony given on behalf of the plaintiff.

It may be said with great propriety that an abstract question of law only is presented, and that is whether the appointment of the principal as teller and the consequent suspension of his duties as bookkeeper was one which "relieved the defendant from the obligations he assumed when he executed the bond. As we have seen, such a change in the position and duties of the principal relieved him front any obligation.

The judgment should, therefore, be affirmed, with costs.